Meadowbank moves ahead – Andaurex eyes Meliadine

Vancouver Cumberland Resources (CBD-T) has approved a $10.5 million work program for its wholly-owned Meadowbank gold deposit in Nunavut.

The program will include 16,000 metres of drilling leading to the completion of a feasibility study and mine permitting before year-end.

A preliminary assessment in January 2002 indicated the project could support a production rate of approximately 250,000 oz. per year at an estimated cash cost of US$168 per oz. over an 8-year mine life. About 85% of Meadowbank’s gold would be mined by open-pit methods.

Meadowbank hosts five closely spaced, near-surface gold deposits totalling 7.8 million tonnes grading 5.79 grams gold, or 1.4 million ounces of contained gold, in the measured and indicated category. The inferred resources consist of 10.9 million tonnes grading 4.44 grams gold, or 1.6 million contained ounces.Proven and probable reserves are pegged at 5.5 million tonnes averaging 5.44 grams gold, or 963,000 oz.

In 2002, Cumberland completed 16,000 metres of drilling over the five known deposits. New resource estimates for Meadowbank are expected in the second quarter of 2003.

Moving over to the nearby Meliadine East project, held equally between Cumberland and Comaplex Minerals (CMF-T), ground geophysics and selective diamond drilling is also slated for this year.

On the Meliadine West gold property, Australian-based WMC (WMC-N) has an interested buyer for its 56% stake.

Andaurex Industries (AWX-V) and Sakku Investments, a wholly owned subsidiary of the Kivalliq Inuit Association (KIA) have signed a memorandum of understanding paving the way for the partners to negotiate the acquisition of WMC’s interest in the property.

Located 20 km north of Rankin Inlet, Meliadine West hosts six deposits with a total resource of 22.1 million tonnes grading 6.33 grams gold per tonne. WMC spent over $55 million advancing the project through prefeasibility studies but in early 2001 announced its intention to divest itself of its stake after a corporate decision was taken to get out of the gold business.

To maintain its interest in the project, WMC must make annual cash payments to its Canadian partners of $1 million at the start of each New Year until commercial production has been achieved. The payments escalate to $3 million beginning in 2006. WMC is also required to keep the properties in good standing.

The project has been shopped around to every major in the world, but with a price tag pegged at around US$22 million; there have been no takers.

Cumberland and Comaplex each hold a 22% interest in the idle 4.5-million oz. property with both companies carried all the way through to production. The juniors also hold a first right of refusal to the sale of WMC’s interest.

Provided that a purchase agreement can be reached, Sakku has the right to exchange its interest in the project for Andaurex shares.

Sakku is a Nunavut company formed to manage the investment interests of the KIA, which is one of three regional birthright organizations formed in the new territory of Nunavut. The association is responsible for advancing and protecting Inuit interests within the Kivalliq Region under the terms of the Nunavut Land Claim Agreement.

“The mandate of the new company will be to directly participate in the development of Meliadine West and potentially other projects in the Kivalliq Region of Nunavut,” says KIA’s President Tongola Sandy.

Earlier this year, Andaurex dealt its LH gold property near Silverton, British Columbia to fellow junior Orphan Boy Resources (ORS-V). Under the deal, Orphan Boy agreed to purchase the property by paying $150,000 before June 15, 2005. Andaurex retains a 1-% net smelter royalty, which Orphan Boy can purchase for $1.2 million.

Andaurex has 6 million shares outstanding, posts a market capitalization of less than $2 million and as of Sept. 30, 2002 had $275,000 in its kitty.